The biological activity of polypeptides and proteins is determined, to a large extent, by their spatial structure. Therefore, calculation of the free energy F is important since minimum F is the criterion for conformational stability. However, with the usual simulation techniques calculation of F is difficult. The "local states method" suggested by Meirovitch is a procedure which enables one to extract F from computer simulation samples; it is independent of other techniques (such as thermodynamic integration methods) and has the following advantages: 1) The method can be applied to any chain flexibility, stable states as well the random coil or states which are mixtures of these two extreme cases, and 2) It can be used to obtain deltaF between two states with a large structural difference. The local states method has been successfully applied to lattice models and to a realistic continuum model of decaglycine. Our short term goal (Phase I) is to extend the method to molecular dynamics samples of linear and cyclic peptides with side chains in water. We shall study the cyclic peptide (Ala-Pro-D-Phe)2 in vacuum and in the crystal, decaalanine in water, in both helical and hairpin states and the neuro peptide gonadotropin releasing hormone (GnRH). The long term goal is to further extend the local states method to larger systems such as protein-ligand complexes and to general problems of protein folding. This important toll will be added to the Insight- Discover software package of Biosym Technologies, Inc.